SANTA ANA, California – The chairman of an Irvine investment firm and his girlfriend were arrested this morning on federal wire fraud charges that accuse them of running a Ponzi scheme that collected $8 million from approximately 60 Korean-American victims who lived throughout California.

Euirang Hwang, 36, and Sang Yi, 39, were arrested without incident at a house in Corona by special agents with the FBI. The defendants, who at the time of the alleged offenses resided in Harbor City, are expected to make their initial court appearances this afternoon in United States District Court.

Hwang, a naturalized United States citizen, was the founder and chairman of Pinupito Inc., an investment company that operated out of offices in Irvine. Yi, a South Korean citizen, who was the president and secretary of Pinupito, exercised control over Pinupito’s finances and bank accounts.

According to the indictment in the case, Hwang and Yi promised investors annual returns of up to 45 percent with false representations that Pinupito generated income by buying smaller companies in Korea, growing them, and selling them for a large profit. Investors were falsely told that Hwang was a billionaire and that his profitable company had extensive holdings in Korean businesses and real estate.

The indictment alleges that Hwang and Yi made false representations to investors. The money collected from investors was not used to finance Pinupito’s operations, but rather was used to pay, among other things, luxury car leases, personal expenses and returns to existing investors.

Hwang and Yi marketed Pinupito to members of the Korean-American community, soliciting some investors during meetings held at Korean-language churches.

Hwang and Yi were named in a four-count indictment returned by a federal grand jury on February 3.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

Each count of wire fraud in the indictment carries a statutory maximum penalty of 20 years in federal prison.

The case against Hwang and Yi is the result of an investigation by the Federal Bureau of Investigation.